What Canadians Typically Have Saved in Their RRSP by Age 40

Many Canadians underestimate how much they have saved for retirement by the time they reach age 40, especially when compared with what financial planners consider ideal. Data shows that the average Registered Retirement Savings Plan (RRSP) balance for Canadians around age 40 sits around $82,000, but the median balance — which gives a better picture of the “typical” saver — is much lower at about $33,000. That gap highlights that a smaller group of high-savers significantly lifts the average, while most people have substantially less tucked away.

An RRSP is one of Canada’s most valuable retirement savings vehicles because contributions are tax-deductible, meaning you lower your taxable income now and let your investments grow tax-deferred until withdrawal later in life. However, even with this tax advantage, many Canadians fall short of commonly suggested benchmarks. Financial advisors often recommend having multiple times your annual income saved by age 40 to stay on track for a comfortable retirement — for example, three times your salary — but the current average and median figures show most people are well below that target.

Several factors contribute to relatively low RRSP balances by age 40. Lifestyle expenses such as housing costs, raising a family, and other financial priorities can make regular, significant contributions challenging. Additionally, many savers don’t start maximizing contributions early in their careers, which reduces the power of compound growth over time. Regular investing, even in small amounts, can make a big difference thanks to compound returns over decades.

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Despite these averages, it’s important to remember that retirement planning is highly personal. Your ideal savings amount depends on your income, lifestyle goals, expected retirement age, and other retirement income sources such as pensions or the Canada Pension Plan. Checking where you stand today against projected needs and increasing RRSP contributions when possible can improve your prospects of reaching long-term retirement goals.

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In short, while the typical Canadian’s RRSP balance at age 40 may seem modest relative to retirement goals, understanding where you stand and increasing disciplined contributions can significantly alter your long-term financial outlook.